When a pair of Australian retailers removed Grand Theft Auto V from their shelves in response to a consumer petition last week, Take-Two Interactive chairman and CEO released a measured statement expressing his disappointment in the decision. In a presentation at BMO Capital Markets 2014 Technology & Digital Media Conference today, Take-Two president Karl Slatoff was a little more animated with his reaction.
"We have 34 million people who bought Grand Theft Auto, and if these folks had their way, none of those people would be able to buy Grand Theft Auto."
"It's one thing for someone to not want to buy a piece of content, which is completely understandable," Slatoff said. "And that's really the solution. If you don't like it and it's offensive to you, then you don't buy it. But for a person or a group of people to try to make that decision for millions of people... We have 34 million people who bought Grand Theft Auto, and if these folks had their way, none of those people would be able to buy Grand Theft Auto. And that really just flies in the face of everything that free society is based on. It's the freedom of expression, and to try to squelch that is a dangerous and slippery slope to go down. So it's really more disappointing for us in that regard than it is in the context of our business. Our business is going to be completely unaffected by this; it doesn't make a difference to us. At the end of the day though, it's not something you want because it's a poor leadership decision."
Slatoff's remarks came in response to a question about whether the removal of the game from some store shelves had led to an uptick in digital adoption in the country. Slatoff said "the Australia situation is disappointing on many levels," but noted that the publisher hasn't seen any such change in customer habits.
"Australia is relatively small for us, and two retailers are relatively small in the context of Australia," Slatoff said. "There are other places for folks to buy Grand Theft Auto in Australia."
Slatoff was also asked about Sony's recent hacking woes, and whether the industry's continued struggles with hackers were any threat to the growth of digital distribution. While Slatoff described them as incidents he wouldn't wish on any of Take-Two's competitors, he called hacking "a reality of life" when dealing with connected networks.
"[I]t would take an incredible groundswell, something of biblical proportions would have to happen to thwart the consumers' enthusiasm to participate in these networks and transact online."
"We hear about these things all the time, and I think to a certain degree, you start to become desensitized to it, because you understand as a consumer that there's always a risk," Slatoff said. "And it's not just a Sony issue; it's any online connected environment. We see it with online retailers and we see it with physical retailers. But it's obviously an area where people are--I don't want to say they're becoming more comfortable with the risk of what happens if someone hacks and gets hold of my information--but they're certainly becoming more exposed to it. And I think it would take an incredible groundswell, something of biblical proportions would have to happen to thwart the consumers' enthusiasm to participate in these networks and transact online in any given way. So I see these things as speed bumps; I don't see them as brick walls."
Take-Two is certainly planning on digital revenues to be an increasingly important part of its business in the future. One of the publisher's key strategies going forward is to provide deep content with its original releases, but supplement those with a wealth of meaningful downloadable content--some free, some paid--that will keep people engaged and drive "recurrent consumer spending," Take-Two's phrasing for all digital revenues beyond an initial full-game download.
"It really has to be something they value, and that's something that is a very strong focus of our company," Slatoff said. "It's becoming more and more important to us, and I would like to say that on every release at one point in the future that we've got some sort of recurrent consumer spending strategy around every single release. I can't say that today, but we're getting there."